1). It isn’t the job of Government to provide handouts to failing companies.

Chrysler, Ford and GM are asking for handouts because their business model failed. Now they want a taxpayer funded handout to keep them, temporarily, in business. How will the “Detroit 3” become competitive and stay in business? They have no idea – but they want the “Handout” now. Did any of the Detroit 3 Auto Execs come to Congress with The UAW President and say, “This is how we will transform the “Detroit 3” “, of course not. The don’t want “change”, they want the money!

2) The “Detroit 3” are bankrupt today – they don’t have the necessary cash to continue operations for 90 days. Let them file for bankruptcy and reorganize like any other company.

The “Detroit 3” need to file for Bankruptcy protection and reorganize the Companies under Court supervision? Why won’t they do this? Because they want to keep things “business as usual” – that is why.

The “Detroit 3” must fundamentally change how they do business.

The “Detroit 3/UAW” have no plan and no intention of changing how they do business – Did they appear before Congress to say, “This is what we propose – here is how we can cut costs futher and compete – this is how we will restructure. We had it wrong before, but we think this will work”. No they have not – They are expecting a “political payoff” from the Democratic Party.

Listen to what they are saying – there is no “blame” and nothing to fix – they are the victims of the economy.

Just before his arrival in Washington, UAW President Ron Gettelfinger said, “workers will not make any more concessions and that getting the automakers back on their feet means figuring out a way to turn around the slumping economy”. http://www.kirotv.com/automotive/17989541/detail.html

Good, I agree, go home and wait for the economy to turn around. Stop asking for a “handout”. As noted below, the “Detroit 3” problems are systemic. The “New American Auto Industry” is still making profits, even in this economy.

3). Without change, the “Detroit 3” is simply not competitive.

The “Detroit 3/UAW” lose money on every car they make. The “Detroit 3/UAW” have had to scrap their “zero down” purchase program, their “pull ahead” lease programs (when the solution to not being able to afford your current lease is to add it into a new lease – and have the “leasor” take out a new mortgage and fund the auto transaction with “mortgage cash”). The “Detroit 3/UAW” have abandoned their lease programs in general without announcing any plan on how they will recoup the losses.

4). The “Detroit 3/UAW” is not the future of the American Auto Industry.

The “Detroit 3” or the “Old Auto Industry” employ approximately 175,000 people. The “New Auto Industry” employs approximately 150,000 in the US.

While the “Detroit 3/UAW” have lost 100,000s of workers, the “New Auto Industry” or “Transplants” are hiring and building more plants. In 2007 the “New Industry” announced plans to build 5 new plants in the United States. The “Detroit 3” and their suppliers have closed 70 plants in the US since 2005. http://www.msnbc.msn.com/id/24947044

How much have the “Detroit 3/UAW” lost in the last 40 years? Consider this June 2008 article, “Toyota’s stock market valuation of $168 billion is 12 times the size of Ford’s market cap….. In fact, an even more surprising statistic: Toyota is 8 times larger than Ford and General Motors combined.” http://www.bloggingstocks.com/2008/06/27/the-next-toyota-is-ford/

A $25 Billion “bailout” has already been passed and they want $25 Billon more for a total of $50 Billion when the subject companies have a total market value of $9.2 Billion dollars. They are kidding, right? $50 Billion of new money into companies with failed business plans and a market worth of $9.2 Billion. Isn’t that the definition of “good money after bad”.

How about this as an alternative to the “handout” – Buy the “Detroit 3” for $10 Billion, file for bankruptcy protection/reorganization, get rid of the CEO’s, UAW, supplier contracts, reorganize the business model and then ……. GIVE THE “DETROIT 3” to TOYOTA WITH $10 Billion Dollars cash and let Toyota run the new business – it would save $30 Billion in taxpayer money over the current proposals and you would quadruple your chances of getting a viable company at the end of the process. The icying on the cake – The “New Detroit 3” would have “green friendly” autos …

6). Private investors think the “Detroit 3” are a bad bet? Why is the investment community wrong? The Government should limit itself to “Governmental duties”

The Government can do things private investors cannot. The Government can lower taxes, decrease regulation, provide tax abatements, all things to make a marketplace “business friendly” – but the Government is not talking about doing any of these. The Government is considering giving a “handout” to Companies that the International investment community has given up on. If Government wants to help, let them do all of the Governmental activities listed above …… but Government should stay out of the handout business.

Don’t forget that the Government has plans to increase “capital gains” and other business taxes. Now does this make any sense – talking about billions in bailouts and billions in new business taxes at the same time … Only in Washington DC does it make sense to pursue two policies, that are directly opposed to each other, at the same time …

The “Detroit 3/UAW” are asking for the “handout” because they can’t get a loan in the marketplace –

The International investment community doesn’t want to buy their company stock or provide loans.

8). The “New Auto Industry” is winning the “competition” for auto buyers – isn’t that what the “American System” is all about? The purpose of the handout is what? To reward failure while punishing success?

“Junior engineer Takeo Fukui helped put Honda Motor Co. on the U.S. map with a Civic subcompact that met clean-air standards without a $1,000 tailpipe filter known as a catalytic converter. He was 28. Today, as Honda’s chief executive officer, Fukui, 61, is racing to repeat his triumph, engineers are building a diesel engine for 2009 that Honda says will meet both new U.S. limits and more stringent California rules on soot and nitrous oxide emissions and still use 30 percent less fuel than gasoline models.” http://www.bloomberg.com/apps/news?pid=10000101&sid=aGUDxfTgbHY4&refer=japan

Contrary to the Political Spin on TV, the “New Auto Industry” or “Transplants” pay retirement and medical benefits to their employees.

May 9, 2007 – Toyota announces record $14 billion profit Annual profits have risen 19.8% to a record $1.64 trillion yen ($14 billion). Revenues, which rose 13.8%, reached 23.94 trillion yen ($204 billion) for the year ending March 31 with 8.52 million vehicles rolling off the showroom floor. Its major rivals are doing it tough. General Motors, which lost its position as top-dog for the first time ever, lost $2 billion, while Chrysler Group lost $680 million with Ford suffering a massive $12.6 billion blow-out.

Honda Motor Company warned of lower-than-expected annual profits as a deepening financial crisis has hammered demand for cars and sent the yen soaring, while U.S. rivals sought government aid to fund a proposed merger to survive a shrinking market. Honda is considered one of the best-placed among global automakers to weather collapsing car demand and shrinking margins thanks to its manufacturing flexibility and vehicle line-up that is geared toward fuel-efficient models. Honda cut its annual operating profit forecast by 13 percent. …. the yen suddenly jumped to multi-year highs against almost all major currencies, eroding the value of earnings made overseas. http://www.newsdaily.com/stories/tre49r1qk-us-autos/

9) Why do they refer to the “Detroit 3” as American Auto Companies? They are no more American than any other “International Company”. Chrysler is not even a “Public Company”. So why do the “Detroit 3” deserve special treatment at the expense of the other half of the US Auto Industry?

Chrysler was just recently a “German” company, remember Daimler-Chrysler. Now Chrysler is a privately owned company. Why are we even talking about a “bailout” for a “private company”.

The taxpayers being asked to “bailout” Cerebus can’t even own a piece of the Company. “It is not a public company and you cannot buy or sell its stock. (It was a public company until last year when Daimler sold most of Chrysler to Cerebus.) An LLC is a corporate structure that limits the liability of its owners, similarly to a corporation.” http://smallbusiness.yahoo.com/r-answers-a-20080114050334AA9ZyJk-k-stock+trade

Why is Congress even considering a “bailout” to a privately held company with 100’s of Billions of dollars and dozens of companies under its control. Cerebus is, after all, a “capital management firm”. Let them raise the capital on their own – If one of the worlds largest capital management firms can’t find investors for Chrysler – what are the Politicians thinking? A political payback at taxpayer expense?

As for Genral Motors and Ford, their stock is owned by Mutual Funds, Hedge Funds, American Banks, Foreign Banks and individuals all over the world. Ford & GM have holdings all over the world. They are members of the global business community. Many investors have “shed” or “sold” their stock in Ford & GM. GM and Ford make profits on their “overseas” business operations.